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Let the industry demand be D(p) = 100−p, and the industry supply be S(p) = p....

  1. Let the industry demand be D(p) = 100−p, and the industry supply be S(p) = p.

    1. (a) Find the equilibirum quantity and the equilibrium price

    2. (b) Draw the demand and supply on a graph. Show on this graph the equilibrium, the consumer surplus and the producer surplus.

    3. (c) Find the value of the producer surplus.

    4. (d) Find the value of the consumer surplus.

    Now let the government introduce a value tax of 50% paid by the producers.

    1. (e) Find the new consumer’s surplus.

    2. (f) Find the new producer’s surplus.

    3. (g) Find the government revenue.

    4. (h) Find the deadweight loss.

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